Oil industry opposes windfall tax in upcoming budget

In a letter to the prime minister, Oil Companies’ Advisory Council (OCAC) — a cartel representing around three dozen oil marketing companies and refineries — demanded an urgent meeting on oil industry’s pressing challenges. OCAC Chairman Asif Iqbal said the meeting of leadership of top 10 oil industry players with the prime minister was crucial to discuss the critical issues that are adversely impacting the financial sustainability of the downstream petroleum sector. “The oil industry is currently facing acute liquidity constraints and growing financial pressures owing to delayed recoveries, rising operating costs, increasing compliance requirements and policy uncertainties,” Mr Iqbal wrote to the prime minister, urging timely policy intervention for stability. The OCAC chief said the outstanding PDCs worth about Rs54 billion had been released to the industry, while outstanding claims of around Rs66bn still remained pending. “The prolonged delay in settlement of these claims has severely impacted cash flows and resulted in a significant liquidity crisis for OMCs,” he said adding that despite extensive verification through internal and external audits, only a portion of the verified claims had been disbursed so far. The OCAC demanded that Oil & Gas Regulatory Authority (Ogra) be directed to facilitate the release of all outstanding claims by June 8 in order to provide much-needed relief to the industry. Next, the oil industry agitated against the proposed taxation in the coming budget